Euro area industrial production falls in June

Euro area’s industrial production as a whole dropped at the end of the second quarter, given the softness witnessed in the biggest two member states. The aggregate output dropped 0.6 percent sequentially in June. In the absence of a solid growth in energy production in June, the drop would have been steeper. The manufacturing output dropped nearly 1 percent sequentially reflecting weakness in the production of intermediate capital and consumer goods alike.

However, this was just the first decline in manufacturing output since January, and coming on the back of the solid rise in May, production in the sector was on average 1.3 percent quarter-on-quarter higher than in the first quarter in the June quarter. Similarly, the over 1 percent quarter-on-quarter rise in the total industrial production was the largest since the first quarter of 2015. Thus, having given no support to the euro area’s growth in the first quarter, industry seems to have accounted for nearly half of the 0.6 percent quarter-on-quarter rise in GDP last quarter.

And while business surveys have given mixed messages at the beginning of the third quarter, all continue to indicate towards elevated sentiment and several order books in the sector, implying that it should continue to underpin the recovery via the second half of the year too.

At 22:00 GMT the FxWirePro's Hourly Strength Index of Euro was bullish at 76.9244, while the FxWirePro's Hourly Strength Index of US Dollar was slightly bullish at 82.0472. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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